Institutional reforms

The government must now step back from direct engagement in the economy and focus on correcting market and social distortions

There is a great deal of talk these days that the revival of growth will require major policy reforms. Vijay Kelkar and Ajay Shah in their outstanding book (1) on the art and science of economic policy, give the thumb rule that major policy changes and institutional reforms in the government’s interface with the economy are required with every doubling of GDP. In fact, the authors argue that one should prioritise institution-building over GDP growth. 

India’s GDP since 1950-51 has completed four doublings by 1969-70, 1987-88, 1999-2000 and 2010-11. Could we have experienced four shifts in policy around these times,